With so many options for Guaranteed Universal Life Insurance for seniors, it can be overwhelming to know which policy is the best for you.

Seniors in particular have a whole different set of needs than someone who is younger and just starting out. Unfortunately, what comes with the age is the hefty price point of life insurance. 

This is why Guaranteed Universal Life Insurance can be a great option for seniors due to its affordability and combination-like qualities between term life and whole life insurance.

So. how does GUL work for seniors and how does it compare to some of the other life insurance policies available?

What Is Guaranteed Universal Life Insurance?

As noted, GUL is a permanent term life insurance that comes at an affordable price for seniors. The reason it is so affordable is because it acts as the middle guy between term life and whole life insurance policies. While you are guaranteed the death benefit being paid out, GUL lacks the frills that come with whole life insurance such as, cash accrual. 

Benefits of Using GUL Policies 

You can expect the following benefits when you go with a guaranteed universal life insurance policy. 

• Lifelong Coverage at an Affordable Cost
• Guaranteed Death Benefit Amount
• Ability to Decrease Benefit If Needed
• Some Offer Return of Premium

Less Than Whole Life, More Than Term Life

GUL is the answer between choosing between whole and term life insurance policies. Whole life insurance policies are expensive and comes with a savings component that adds to the cost of the policy. While seniors may want to guarantee a death benefit to their loved ones, they may not need some of the extra’s that drive those premiums up. 

Term life is incredibly affordable but only offers a temporary solution. GUL gives the ability for the insured to ensure the beneficiaries don’t inherit their debts, receive the guaranteed payout, and have life insurance coverage until death rather than a predetermined amount of time. 

The Guaranteed Death Benefit Amount 

This is arguably one of the most important things when it comes to life insurance. As mentioned with term life insurance you are not guaranteed the amount unless you pass before the policy expires. The policy will deliver the money put in with the minimal cash value earned to the beneficiary upon death. 

There is also an option to have riders in there depending on your specific needs. If you want to add disability insurance or long-term coverage to your life insurance policy it is possible. 

Ability To Decrease The Benefit

This a great option for many because as seniors get older their needs change. At some point, they may need to cover a mortgage or college tuition. But as seniors age and have that ability to pay off their debts, they may not need the same kind of coverage and death benefit as they did 5-to-10 years ago. 

With the ability to decrease the benefit as you get older it becomes an attractive option to save money for seniors who again don’t want or need some of these extra frills. 

Return Of Premium

Not all but some GUL policies will offer a return of premium if you either surrender or cancel your policy. While it changes company to company, some insurance agencies will give a time to surrender and give back a percentage of the premiums you have already paid. Other options include canceling your policy and possibly giving back all the premiums you paid. 

Sometimes as financial responsibilities decrease or even disappear, a senior may decide they don’t need life insurance coverage anymore. 

Why Do I Need This Life Insurance?

Above we talk about some of the benefits that come with buying into a guaranteed universal life insurance policy. But the “why” behind these factors is the real reason you would want to buy GUL insurance.

Reasons for Using GUL Insurance

How the benefits translate into your daily life as a senior will look just like this. 

• Estate Planning
• Taking Care of a Child/Spouse for Life
• Unpaid Debts
• Long-Term Care

Estate Planning

If you have an estate that accrues up to $11.58 million and doesn’t want your beneficiaries to have to suffer federal taxes on the estate, buying a Guaranteed Universal Life Insurance Policy can assist in protecting your beneficiaries from these taxes if the life insurance policy is transferred correctly. 

Another reason that estate planning works well with GUL is that if there are debts that have not been paid and the policyholder has not transferred the GUL to trust or another adult, collectors may use the estate to pay off these debts. This can come as a shock to beneficiaries left behind so it is best to include your estate planning with your life insurance company. 

Take Care of a Child/Spouse 

While the option to decrease your death benefit is great because you may have to change financial responsibilities as you get older, making sure you can take care of your spouse or child should you wish is also important. 

You may want to set aside a large sum of money in life insurance to take care of any medical needs that your family may have and not be able to afford. Or you may be the person who has worked in the family and your wife or husband does not have a job. This just allows a safety net to be distributed on your behalf to the beneficiaries. 

Unpaid Debts

On the other hand, if you still have a mortgage, school education, or any other large debts you don’t want your children to inherit, this is also where a death benefit is great. This life insurance money is exempt from collectors making a claim. In other words, your children won’t inherit your problems.  

Long-Term Care/Disability Care

Guaranteed Universal Life Insurance has rider options that can help with disability care and long-term care. It’s common for many seniors to gravitate towards senior centers and nursing homes at some point and by going with a policy like GUL, these costs can be covered rather than accumulate more debt and passed down to your beneficiaries. 

What Will I Pay with Guaranteed Universal Life Insurance?

What you pay for GUL your rates will vary on a number of factors. As with any life insurance, gender, age, health, lifestyle, smoking status and more, will affect how much you pay. For seniors in particular the rate goes up if you are a smoking male and are on the older side. 

What Are the Risk Classes?

Risk classes come in essentially six different groups. Two of them are dedicated to tobacco users whereas the other four are designated for non-smoking lifestyles. These groups are broken down further into risk factors. How you rate within each one will determine where you fall in the groupings. 

Preferred Plus: 

This is the highest level of health you can achieve with the lowest possible premiums you can pay for life insurance. For preferred plus, you will have to rate highly in each of the following risk factors. 

Blood Pressure – General guidelines are that your average readings within the last two years should be below 136/86. This blood pressure must be controlled either naturally or with medication.

Cancer History – Only some certain skin cancers are accepted. 

Driving History – No more than two moving violations in the last three years and no DUIs, reckless driving, license suspension in the last five years. 

Substance Use – No abuse of any alcohol or drugs. 

Tobacco History – No use of tobacco history in 36 months with the allowance of one cigar a month without nicotine. 

Preferred: 

This is the second-highest level of health you can achieve with the second-lowest possible premiums you can pay for life insurance.  

Blood Pressure – General guidelines are that your average readings within the last two years are below 146/90. This blood pressure must be controlled either naturally or with medication.

Cancer History – Only some certain of skin cancers are accepted. 

Driving History – No more than two moving violations in the last three years and no DUIs, reckless driving, license suspension in the last five years. 

Substance Use – No abuse of any alcohol or drugs in the past 10 years.  

Tobacco History – No use of tobacco history in 24 months with the allowance of one cigar a month without nicotine. 

Standard Plus: 

This is the option one step above your standard option. Relatively speaking your premiums are still going to be affordable but more expensive than the previous two options. 

Blood Pressure – General guidelines are that within the last two years your blood pressure should have been below 152/92. This blood pressure must be controlled either naturally or with medication.

Cancer History – Dependent on type and date of onset of cancer.  

Driving History – No more than three moving violations in the last three years and no DUIs, reckless driving, license suspension in the last three years. 

Substance Use – No abuse of any alcohol or drugs in the past seven years. 

Tobacco History – No use of tobacco history in 12 months with the allowance of one cigar a month with nicotine. 

Standard: 

This is the entry-level of life insurance.

Blood Pressure – General guidelines within the last two years are that it should be below 156/94. This blood pressure must be controlled either naturally or with medication.

Cancer History – Dependent on type and date of onset of cancer.  

Driving History – No more than four moving violations in the last three years and no DUIs, reckless driving, license suspension in the last two years. 

Substance Use – No abuse of any alcohol or drugs in the past seven years.

Tobacco History – No use of tobacco history in 12 months with the allowance of one cigar a month without nitcotine. 

Tobacco Standard and Preferred

If you score negatively in the other risk factors and are a smoker, most likely you will be placed in the tobacco standard. However, if you score relatively well in those categories but then smoke infrequently you may be a tobacco preferred risk class. 

Monthly Premiums

On average the number will increase by male and age. Here are some average examples of some of the monthly premiums of men and women. 

Age 60 Male: $114.93

Age 60 Female: $102.40

Age 65 Male: $153.70

Age 65 Female: $127.63

Age 70 Male: $198.93

Age 70 Female: $158.46

A Great Option

Guaranteed Universal Life Insurance is a great option for seniors because of all the benefits that come with this option. The ability to find a middle ground between the pricey whole life insurance and the restrictions that come with term life policies is perfect. As a senior, naturally your life insurance monthly premiums are going to be higher, specifically if you are male. But at the end of the day, these are still an affordable life insurance policy that guarantees the death benefit for any of the reasons you need. 

The other benefits that come with this option are protecting your estate as well as the possibility to have a return of premium option should you not need the policy anymore. If you do need the policy because of debt, but then that is paid down with 10 years left on your plan, you can always decrease the death benefit. 

The GUL essentially is like buying a reliable Toyota. It’s not a Mercedes with all the frills but it is also not a car that breaks down on the side of the road frequently. This option is stable and reliable with the ability to upgrade or decrease payment based on your needs. 

This is why Guaranteed Universal Life Insurance can be a great option for seniors due to its affordability and combination of sort between term life and permanent coverage.